PetroChina and China Development Bank, along with Venezuela Social Development Bank, state-owned Petroleos de Venezuela, Venezuelan Ministry of Finance and Ministry of Energy and Mines signed the China-Venezuela long-term fund raising cooperation frame agreement.

PetroChina has written up a memorandum of understanding for four projects. In addition, the National Energy Administration concluded intergovernmental agreements about the Junin 4 block projects.

China and Venezuela will establish a joint venture for the projects, with PetroChina holding 40 percent and Venezuela 60 percent, and they are expected to produce 2.9 billion barrels of extra-heavy crude oil in the 25-year-constract term.

According to the cooperation frame agreement, China will provide Venezuela funds for 10 years totaling $20 billion. Venezuela’s National Oil Company has signed an oil supply contract with PetroChina as a guarantee for repayment.

The Junin 4 block is expected to require about $16 billion investment over three years and it will eventually produce more than 400,000 barrels per day.

The fund consists of $10 billion, and 70 billion yuan ($10.25 billion). The 70 billion yuan fund will be a trial to internationalize the yuan. Given the large oil reserves and oil potential, the settlement of the deal in yuan will raise the Chinese currency’s position in oil trade, Wang Peng, a Latin America researcher at the Chinese Academy of Social Sciences (CASS), told China Business News.

Officials at PetroChina said all the deals will play an active role in promoting friendly cooperation between the two countries and bring diversified oil supply for the company.

With surging oil demand in emerging markets and limited traditional resources, the competition for non-traditional oil supplies has become increasing fierce. Given the richest reserve area of heavy oil and extra-heavy oil in Venezuela, the deal is of strategic importance, said Xu Xiaojie, an economics and political researcher with CASS.

Located in the Orinoco heavy-oil strip, with an area of 325 square kilometers, the four oil blocks boast a recoverable reserve of 8.7 billion barrels of oil with an annual output of 20 million tons.

Figures from the Chinese government indicate the country imported an average of 132,000 barrels per day from Venezuela for the first two months of 2010.

Increase in LNG imports would necessitate commensurate capacity addition in infrastructure like pipeline, LNG re-gasification terminals, storage capacity and city gas distribution network as well. But with the downstream hydrocarbon regulator Petroleum and Natural Gas Regulatory Board (PNGRB) and the petroleum ministry fighting court battle over jurisdictional issues, adding infrastructure capacity at a required pace would be a serious challenge.

For example, the government set up PNGRB in 2006 to expedite capacity addition in the country’s pipeline and city gas distribution network. The regulator successfully conducted bidding in 2008 for granting authorisation for setting up city gas distribution projects in seven cities. Later, it held the second round of bidding in 2009 for granting authorisation for some more cities. But, meanwhile, jurisdictional issues sparked litigation between PNGRB and the petroleum ministry. The matter is subjudice in the Delhi high court. Pending that, PNGRB cannot grant authorisation for setting up city gas distribution projects in these cities.

The petroleum ministry has proposed setting up a parallel body, national gas highway development authority, to supervise implementation of cross-country pipelines in a bid to clip PNGRB’s powers.

The global LNG supply is projected to outpace demand in this decade because of unforeseen factors like a structural shift towards non-conventional gas in the consumption patterns of key energy-consuming countries such as the US and a significant increase in piped gas supply to Europe from Russia.

At the end of 2009, global LNG liquefaction capacity was estimated at 340 billion cubic metre per annum (bcma). Additional 60 bcma liquefaction capacity currently under construction is expected to be available over next three years. Besides, and other 130 bcma capacity is in various stages of planning, out of which 44 bcma should be commissioned.

“Even with a conservative estimate of capacity addition, the industry would face an overhang of 80-130 bcma between 2010 and 2015, equivalent to 20-35% of usable capacity in 2013,” says global consultancy firm Mckinsey in a recent report.

India has agreed to cut its carbon emissions by 20% by 2020 over the…

Speaking at a two-day, 12th International Energy Forum (IEF), the Minister said his country was diverting shipments meant for the United States and Europe to India and China. Asia would be the new hub of activity on the energy front. “India is on top of my agenda and we are always committed to meeting its needs,” he said.

Mr. Attiyah held talks with Petroleum Minister Murli Deora on the sidelines of the IEF meet. They discussed pricing of energy and gas supplies. India, under a long-term deal with Qatar’s RasGas, was importing 7.5 million tonnes of Liquefied Natural Gas (LNG) every year.

The two Ministers also reportedly discussed the sharp differences in LNG prices. While Mr. Deora was keen to negotiate a fixed price, Qatar was looking for a price between 13.5 and 15.5 per cent of Japanese crude cocktail (JCC).

Qatar had agreed to supply an additional 4 million tonnes of LNG to meet India’s growing energy needs. The additional fuel would be imported at the under-construction Kochi LNG terminal of Petronet LNG Ltd. and the Dabhol terminal, which was almost ready. It had also entered into a contract to supply 12 million tonnes of LNG to China.

“We have created the trust between the producers and importers over the years. The International Energy Forum also contributed to the trust-building,” Mr. Attiyah said.

Qatar would begin with supply of an additional one million tonnes of LNG to India in 2011 and would augment it to 4 million tonnes by 2014. These would be under 15-20 year contract.

With falling demand from the U.S. and Europe, its principal importers, the LNG-surplus Qatar had developed a soft corner for India and China where energy demand had risen with their respective economies doing well.

The 12th International Energy Forum was seeking support from oil producers and consumers for a joint action in dealing with steep price rise, which was seen during the recent economic crisis.

NOC therefore invited vocational training institutes for the deaf and dumb acros s the country to submit, from 19 April, information on the capabilities and skills of their students to serve in the oil sector.

Tripoli – Pana 19/04/2010

By Moming Zhou

April 20 (Bloomberg) — Kuwait has hired a liquefied natural gas tanker to serve as an offshore terminal to help the country meet rising demand for gas from power plants during the summer months.

The ship, Explorer, owned by Excelerate Energy and Exmar NV, arrived in Kuwait on March 28 with a cargo of LNG from Trinidad and Tobago, according to vessel tracking data compiled by Bloomberg. The tanker can convert LNG back to a gas.

“The Explorer will stay until autumn to receive LNG via ship-to-ship and to regas the LNG,” said Andree Stracke, chief commercial officer of Excelerate, an LNG trading company based in The Woodlands, Texas, that’s half-owned by RWE AG. “The vessel is under regas charter” to Kuwait National Petroleum Co.

Demand in Kuwait for gas from electricity generators during the summer months has outpaced the country’s production of the fuel, according to the U.S. Energy Department. KNPC could not be reached for comment.

The country received an LNG cargo on April 11 from the tanker Express, also owned by Excelerate, according to Bloomberg vessel tracking data. The cargo was from Egypt, according to Stracke.

Both tankers can carry as much as 150,900 cubic meters of LNG, or about 3.25 billion cubic feet when converted to a gas, according to Excelerate.

Excelerate’s Exquisite, which loaded an LNG cargo at Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana on April 16, may bring the cargo to Kuwait, said Charles Martin, director of analysis at Waterborne Energy Inc., a Houston-based provider of LNG shipping data.

Kuwait brought in 11 LNG cargoes last year, including five from Russia, according to Waterborne.

–Editors: Richard Stubbe, Bill Banker.

To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

But the region, which controls over half the world’s extractable oil deposits, needs to be reassured by industrial nations that demand would grow and such investments would not be wasted in idle capacity, the 10-nation Organisation of Arab Petroleum Exporting Countries (Oapec).

Over the next five years, investments in oil, gas and other energy development ventures by the UAE, Saudi Arabia, Qatar, Kuwait and Algeria are estimated at about $470bn, nearly 70 per cent of the total Arab energy projects, it said.

Upstream, midstream and downstream gas projects are expected to get the lion’s share of those investments, accounting for nearly 36 per cent, the report said.

A breakdown showed Saudi Arabia, the world’s oil superpower which controls over 20 per cent of global crude resources, could invest nearly $170bn in the coming five years while investments by Algeria are estimated at $69bn. Kuwait has also announced it would pump nearly $87bn into its oil sector while Qatar is projected to channel in excess of $70bn, mostly in its liquefied natural gas to maintain its position as the world’s top LNG supplier.

“These projects will largely develop the energy industry in the Arab region and at the same time contribute to stable oil and gas supplies to global markets… these projects are considered crucial for the world energy markets given the massive hydrocarbon resources of the region,” the Kuwaiti-based Oapec said. “The Arab countries are willing to pump sufficient investments in energy projects to ensure global market stability and support their economies and sources of income… but there is a need for consuming countries to provide producers with assurances on demand for oil and gas so they will push ahead with those investments… this of course requires a continuation of a constructive and meaningful dialogue between hydrocarbon producers and consumers.”

Oapec’s figures showed the Arab region’s proven oil reserves stood at 667.4 billion barrels at the end of 2009, accounting for about 56.6 per cent of the world’s total recoverable crude potential. The Arab gas wealth was estimated at 52.5 trillion cubic metres, nearly 28.1 per cent of the world’s gas deposits.

Citing estimates by the International Energy Agency, said the world needs to pump nearly $26trn into oil expansion projects until 2030.

“There is no doubt such huge investments face challenges following the eruption of the global economic crisis, including the slowdown in the world oil demand and a sharp fall in energy infrastructure ventures because of the credit squeeze… this could adversely affect hydrocarbon supply in the future.”

In a recent study, the Arab Petroleum Investment Corporation (Apicorp), said it expected regional oil producers to shelve several energy projects because of unstable crude prices and slower growth in demand.

India has proposed to set up a LNG terminal in Bangladesh in a joint venture to create a power generation capacity of around 1,000 MW, NTPC sources in New Delhi said yesterday.

According to the proposal, after meeting demand in Bangladesh, the remaining power will be supplied to India through a transmission link being set up between the two countries by state-owned Power Grid Corp. of India Ltd.

Details of the plan would be decided after a Bangladeshi delegation visits India soon to study the LNG terminals.

“Since Bangladesh does not have much coal reserves, we suggested setting up an LNG terminal either through a joint venture with India or on their own. They can then use the gas to generate power and also sell it to India through the transmission link we are building,” Indian Power Secretary HS Brahma said.

“A delegation from Bangladesh will visit India shortly to take this forward,” he added.

The proposal was made by the Indian government during Brahma’s visit to Bangladesh in February to hold discussions on a power plant that NTPC Ltd is planning to set up there, apart from other areas of energy cooperation.

“We had made this proposal to Tawfiq-e-Elahi Chowdhury, energy adviser to the Prime Minister of Bangladesh,” Brahma said. “Since the current gas- producing fields in Bangladesh are old and due to the low pressure, the domestic gas is not enough, there is a need for gas.”

NTPC is also examining the feasibility of setting up a coal-based power plant in Bangladesh in a joint venture with the Power Development Board of Bangladesh. NTPC is also looking for renovation, modernisation, operation and maintenance opportunities in Bangladesh.

The equity share in the proposed coal-based power plant is being worked out and India is likely to get 49 percent stake in the project, said the sources.

During the meeting, President Nazarbayev expressed his intention to visit Libya at the earliest opportunity, and provided a briefing on the investment opportunities available in his country, and he also talked about its modern capital Astana, which was founded in 1998, pointing out that it offers several success factors.

Mr. Seif al-Islam met with Kazakh Prime Minister, Karim Masimov. Then he visited the National Museum and the Conference Palace, after which he toured the capital, Astana. He had a firsthand experience of its urban development, and visited a number of infrastructure projects such as stadiums among others.

Seif al-Islam Gaddafi has done an outstanding job in Libya and has great plans for Kazakhstan, said Jojar Dhinsa CEO of the Athlone Group. The Athlone Group has a fund of $500 million in Kazakhstan on humanitarian projects. Athlone are currently planning on major projects in North Africa

Kazakhstan is distinguished for its diversified economy. It possesses many of the ingredients that would make of it a great economic power; it has vast agricultural areas, great industrial potentials and is famous for manufacturing tractors and heavy machinery.

The growth in India LNG demand has encouraged the rapid development of LNG export projects, both in the region, which has become the world’s largest LNG supply source, and in the Middle East says Athlone Group CEO Jojar S. Dhinsa

The outlook for LNG demand in the India region is also strong, with Asia Pacific LNG imports projected to nearly double by 2015. The LNG demand outlook provides opportunities and challenges for LNG suppliers to the India market. Competition among existing LNG suppliers to retain markets will be strong, although there will be a key role for new projects. Potential regional LNG supply capacity in the coming decade is significant, although LNG projects are not expected to develop far ahead of imports.